Moskow, Michael

Furthermore, there are some very important fundamentals that should continue to support housing demand. First, productivity growth should continue to bolster gains in wealth and income—some of which will be spent on housing. Second, the financial innovations that have led to more efficient mortgage markets and increased access to credit are here to stay. Third, financial conditions are not very restrictive—after all, 30-year mortgage rates currently are under 6-1/2 percent. Furthermore, there are no "extra" factors reducing the supply of credit—contrast today's environment with the 1960s and 1970s when there were regulatory ceilings on interest rates or with the early 1990's when there was the "capital crunch."